“Housing Minister Phil Twyford confirmed the plans for the new development this morning, describing it as state of the art.” “The current state housing high-rise that sits at 139 Greys Ave will soon be demolished to make way for 280 new units.” “Built in 1957, Housing New Zealand said the high-rise was nearing the end of its life and was no longer fit for purpose.”
Great news that they are finally replacing the current eye sore in Grey Street just up from Aotea Square however if you are a property owner or buyer you may want to take this into account.
Traditionally, public housing decreases values so this development I expect will lover values within roughly a 300m radius 500 more lower decile occupants is a lot of people. Safety, security and peoples perception of value will all be affected…..so this is not good news for Grey Street and the neighboring Vincent street. Hopefully, the council can prove me wrong through their integration idea but I would be sceptical.
There are commonly 3 taxes which can be charged when property is bought or sold.
Goods & Services Tax (GST)
Capital Gains Tax (CGT)
There is no Stamp Duty in NZ (but it is charged in Australia).
CGT only applies if you bought after November 2015 and sell within 2 years.
GST applies when an apartment is on a commercial lease.
When selling your apartment, it is important to know what taxes you may or may not have to pay as this effects the outcome.
There are three main taxes involved when selling your property/apartment in Australasia but not all or any will apply to you necessarily.
New Zealand is a great place for property as the taxes charged are lower than any other first world country.
There is no Stamp Duty which is a tax charged on purchasing a property in Australia or the UK.
Capital Gains Tax only applies to you if you bought after November 2015 and sell within 2 years.
However, the one tax to look out for which many owners forget or are unaware of is GST.
Goods & Services Tax or more commonly known as GST applies to you if the apartment is bought with the intention to be used for what is called a taxable supply.
I.e. for a commercial capacity.
For example, a guaranteed rental, commercial lease or an apartment in a hotel lease.
The important thing here is if your apartment was intended to be used as a taxable supply make sure you talk to your accountant, as there is a good chance that when your sell your apartment a 15% tax will be applied or passed onto the next purchaser both effectively reducing what you are left with.
As an owner, you might be wondering what YOU need to do, or help with, in the process of selling your apartment. After you choose the agent that you feel will best represent you and get a good price for your apartment in the time frame you need, what else needs to be done on your part?
Surprisingly little. We do the leg work for you. From the time you sign the listing agreement to the time your apartment goes on the market and we start getting offers, we are there for every single step of the process. And, we’ll keep you up to date on each step, too.
As an owner you have to find an agent that best suits you and your needs when selling your apartment.
Finding an agent and building a relationship and setting expectations that both parties are happy with is the first and most important aspect of selling your apartment.
Once you have found an agency the rest is fairly simple. You will need to sign a listing agreement and as this is a legally binding document we suggest you get a lawyer to look over this for you. The difference with Apartment Specialists is that we don’t lock you in. You are in control.
The agent will advise you with all the details of the campaign, marketing, the current market and so on.
The final step is making sure you are kept up to date – setting these expectations and how much involvement you would like is up to you and we tailor these to suit you as an individual.
When selling your apartment, did you know there are more than just commission costs? We know, at Apartment Specialists, that, at the end of the day, you want to know how much you’ll be getting in your back pocket when your apartment has sold. You might be surprised to know that you may even get money back. We’ll help you to get a broader picture of what these other expenses are, understand ALL the costs when selling your apartment, so you can take them into account.
The knowledge of what costs you will incur during the process of selling is so important and it is more than just the agent’s commission.
The costs involved are more than just the commission. There are several others involved but don’t let that deter your choice to sell.
Marketing costs generally are around $600 when a property is selling for under a million and around $2300 for property over and above that price.
Lawyer’s fees can range from anywhere between $800 and $1000 for a property with no mortgage and up towards $1300 for a property with a mortgage. Where there is a sale that is more complicated for example a building that may need more due diligence due to building issues these lawyers’ fees may be upwards to $2000.
Lastly, a cost that is overseen when your property is tenanted during the decision of sale being made, your tenants may leave before settlement date leaving you with no income for several weeks. This is where you need to ensure you are prepared for this and/or bring the settlement date forward if able to.
And the good news; you may sometimes be eligible for money back. If you have covered your Body Corporate fees for the year and sell part way through the year you will receive the overpaid amount back upon settlement. Rates are the same deal and will be reimbursed if any are overpaid.
What happens with you sign a sole agency agreement with an agency? Here are 3 examples from owners that we worked with who wanted to sell their apartment. Unfortunately the agencies with whom they signed just didn’t deliver at all or in a timely manner and this is due to the sole agency agreement in their contract.
Signing and selling my apartment with a sole agency agreement and what that means for me. This is important to understand as a Sole Agency agreement is legally binding. At Apartment Specialists we don’t lock you in.
It is important to understand and know your rights as an owner when selling your apartment and what it means when signing a Sole Agency Agreement.
This is because it is a legally binding document and sometimes owners don’t realise this and what implications this may have.
The most common clause in an agreement is signing with an agency and being locked into 90 days with the agency. This means if you are not happy or you feel the agent is not working for you, you can’t change until that time period is up.
We trust in that if the service is good why would you want to leave.
The choice should be yours.
In any other industry this would not be accepted, so why real estate?
How much commission is charged when selling an apartment in Auckland? You should know what you are going to be left with after all the costs.
You also should know what’s most important to you, as an owner, to look for in an agent. We’ll bet it’s that they’ll maximise the amount of money you’ll be putting in your pocket. Just because the commission costs are higher it doesn’t mean you’ll be getting less when your apartment sells!
Get insight on what real estate agents in Auckland charge for commission and why, sometimes, it’s better to pay a little more commission to get a lot more value.
The commission charged when selling your apartment vary depending on your apartments value. You are charged 4% for a value up to $500,00, 2% for a value up to $1,000,000 and 1% upwards from $1,000,000 plus GST.
It is not always about the sales price you can achieve but rather you want to know how much you are going to be charged in commission and what you are going to left with after the sale has gone through.
Usually you will be charged around 4% for a property with a value up to 500,000. 2% for a property up to a $1,000,000 and 1% for properties sold for more than $1,000,000. This is plus GST unless you living outside of New Zealand and can prove your residency, then you won’t be charged GST.
There is however a minimum cost you will be charged and this applies to properties worth 3,000,000 and under.
These can vary across agencies and Apartment Specialists we charge $11,500 plus GST
When you sell a property below 300,000 there is a minimum fee, at Apartment Specialists ours is 11,000 plus GST (This is subject to change without notice).
However, it is more than just what your commission costs are going to be – you want to ensure the agent you have chosen is going to get the best possible deal for you. Asking your agent for their recent sales and what records prices they have achieved is a good idea to inform you with what price you may get.
We have an advantage in the apartment industry to help you realise your apartments worth as there are so many like for likes, for example the same apartment that has been sold in the building with the same specs and so on.
How is the value of your apartment calculated? Oftentimes real estate agents will look at the sales statistics for the apartments in your building and base the current value of your apartment off these previous numbers. But how can sales in your building alone be an accurate gauge on price?
The value of your apartment is usually calculated by a number of factors including recent sale prices, sales in the buildings and the most important like for like buildings in similar areas.
Firstly, we look at apartments that are the same, these are usually in the same building. Most agents stop there; we go further and look at other buildings that are similar to help us gauge the real market value of your property.
This is where our expertise are superior, we have the knowledge of all the buildings in Auckland and understand our market well.
Calculating size, carparks, level and so on are all important factors to consider when valuing a property as well as record prices in the building and recent sales in both your building and other that are alike.
We can market your apartment without even entering the building as we have floor plans of all buildings in Auckland and know these buildings inside and out.
This is probably one of the first questions you ask yourself when you make the decision to sell. You want to know how long it can be until you make the sale to have the money to do what you need to do.
In this quick video, find out what the average rate is for selling freehold, leasehold, and high-end apartments.
On average freehold apartments take 30 days to sell and 3 weeks to settle. Leasehold usually takes double that time.
Planning on how long this process will take is an important aspect to consider when selling your property. We can’t say exactly but we can estimate due to averages that a freehold property takes around 30 days to sell including the campaign and then another 3 weeks to settle from there.
Leasehold properties are different, and typically take double the time to sell (around 60 days) but the same time for settlement, 3 weeks.
Bearing in mind that if your property is tenanted (Periodic) in both situations you are legally obligated to give them 42 days notice in writing if a purchaser prefers vacant possession.
If you’re looking to sell your apartment in Auckland, although there’s no real ‘right’ time there is definitely a period you want to avoid which. If you sell during this time, it can cost you anywhere from $20,000-$50,000.
In this quick video, Andrew Murray at Apartment Specialists tells us exactly when to avoid a campaign to sell your apartment and why! Listen in to find out when the sweet spot is to get your apartment on the market. Apartment Specialists knows… that’s why we’re the specialists.
Apartments are different to houses and can be sold most times of the year, we recommend the only time you avoid is December through to early January.
Selling at the wrong time can end up costing you more than you may have anticipated. However, apartments are very different to houses and most of the year is a good time.
However, the only time to avoid would be the December, early January period – the holiday period, this is due to a lot of events happening in people’s lives, end of deadlines, holidays, family commitments and so on.
As an apartment owner looking to sell, concerns if your tenants will move out or make it difficult for buyers to come around and view the apartment might be bubbling up. And you don’t want them to move out and leave you high and dry, either! That’s costly for you. Apartment Specialists knows this bit of the process needs to be as smooth as possible.
Think of your tenants as gatekeepers. You want to communicate openly with them and respect them like they’re owners. Look after them, because they can limit your access, which throws a big wrench into your plans.
One of the biggest fears for an owner is that selling or thinking about selling will scare away their tenant.
While this is a valid concern it should need be.
The key to looking after tenants is the relationship. Not just so they co-operate during the sale process but to ensure they are happy and your income (rent) isn’t affected.
Tenants want to feel like they are respected and are looked after during the process of selling.
This is a must from an agents point of view as they are also the gate keepers. If they are not happy access is often restricted and so we have a very strict process to ensure this doesn’t occur….it often involves a bottle of wine or two.
The key take away here is to ensure your communication is open and frequent, ensuring they know exactly what is happening throughout out the process and that they are educated on their legal rights.
Remember just like owners they are scared too and so must be looked after.